National Data | More Hispanic Happy Talk From The WSJ Edit Page

By Edwin S. Rubenstein

09/04/2007

Last week, I had to reprove the Wall Street Journal Edit Page for happy-talking the Hispanic role in post-Katrina New Orleans.

But it’s Hispanic-happy-talking again this week.

This time, it’s puffing the Census Bureau’s poverty report [PDF] for 2006:

"Given the rapid growth of the Hispanic population due to immigration and higher birth rates, this [decline in Hispanic poverty rate] is a welcome trend. And it is a trend. Current Population Survey data compiled by Jeffrey Passel of the Pew Hispanic Center show that the Latino poverty rate, which was 22.5% in 2003, has fallen for three straight years. America’s fastest-growing ethnic group has been steadily improving its economic lot, notwithstanding lower education levels on average and overrepresentation in low-skill occupations."

The Other Census Story, September 4, 2007 editorial [Subscriber link, but see also here.]

Yes, in the past few years Hispanic poverty rates have indeed declined by more than those of whites and blacks, while their incomes have risen faster.

But that’s hardly surprising given the extent (reported on VDARE.COM but apparently nowhere else) to which Hispanics have crowded out non-Hispanics in the U.S. labor force.

From January 2003 through July of this year, for example, Hispanic employment rose by 16.9 percent versus a 4.6 percent rise in jobs held by non-Hispanics. The Hispanic share of total employment rose from 12.5 percent to 13.8 percent over that period.

That’s a 10.4 percent increase in Hispanic penetration of the U.S. workforce in just two and one-half years.

Research by George Borjas finds that every 10 percent rise in the foreign-born employment share reduces native wages by 3 to 4 percent — implying that native incomes could have been as much as 3 percent higher in 2006 had a moratorium been in place since 2003, when a moratorium bill was actually submitted to the House of Representatives by Tom Tancredo.

Tack on three percent to white and black household income, and suddenly Hispanics aren’t the unmitigated good news touted by the WSJ.

Equally important to the Hispanic "success" story:

• more workers per household.

Hispanic per capita income in 2006 ($15,421) was only 51 percent of the comparable figure for non-Hispanic whites. But Hispanic household income ($37,781) was 72 percent of the white figure. By calculating poverty rates for households rather than individuals, the Census Bureau makes Hispanics look less impoverished than they really are.

The WSJ Edit Page suppresses other inconvenient truths in presenting its pro-Hispanic spin. For example:

• "The poverty rate among Hispanics is lower today than the poverty rate among blacks (24.3%)."

Yes, the Hispanic poverty rate — 20.6 percent in 2006 — is indeed nearly 4 points below the black rate. But that’s a far cry from the 9 percentage point advantage Hispanics enjoyed back in 1978 — when 30.6 percent of blacks and only 21.6 percent of Hispanics were in poverty.

The real question: why has the Hispanic poverty rate declined by a mere one percentage point since 1978 while the black rate is down by 6.4 percentage points? The real answer: a steady decline in the educational and skill levels of successive immigrant cohorts.

• "Per capita income also increased across the board, by 1.9%, but here, too, Hispanic gains stand out. The per capita income of whites, blacks and Asians, increased by 1.8%, 2.7%, and 8% respectively, while Hispanic incomes rose by 3.1%."

This also looks like good news. But a deeper look at the belated improvement in these numbers — more than five years after the last recession — reveals a lingering malaise, especially for blacks and Hispanics. The median household income last year for all American households last year was $1,000 less than in 2000, before the onset of the last recession. Here are the trends for the major racial groups:

Despite their recent gains, Hispanic household income in 2006 was 2.7 percent below the peak reached before the last recession. Only blacks have lost more ground.

And what is perhaps more disturbing is that it appears this is as good as it’s going to get. Most economists expect slower growth — or worse — in 2007.

The expansion that started in 2001 might go down in the history books as the first sustained expansion on record in which the incomes of middle-income families of all races never reached the peak of the previous cycle.

With immigration still unchecked, this could be the first of many economic expansions that fail to expand.

Don’t expect to read this on the WSJ Edit Page any time soon.

Edwin S. Rubenstein is President of ESR Research Economic Consultants in Indianapolis.

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